Balancing the Books and the Bottom Line

I’ve been down this road before. 

I get it.

Lawyers are trained to practice law. They’re not bookkeepers or accountants. But, time and time again, I see lawyers who don’t timely submit their billable hours, don’t get big enough retainers (or any retainer), let clients slide on paying their bills on time. 

They don’t seem to realize that their fixed costs - salaries, utilities, health insurance premiums, rent/mortgage payments, etc. - will keep coming due no matter how much (or how little) revenue comes through the door. 

It’s a good thing my clients have me around to remind them of that fact.

I kind of enjoy putting puzzles together. And a lot of times, that’s what bookkeeping is. It’s trying to figure out, “Okay, well, you’ve got this mess in this account. How did it get there? What do we need to do to clean it up, so we don’t create a mess somewhere else?” It’s like piecing together a complex jigsaw, deciphering the financial puzzle of a law firm or small business.

I find satisfaction in unraveling the mysteries, determining the right steps to take. And when it all comes together, I provide the business owner with something valuable—numbers they can wield to make informed decisions. Seeing businesses thrive with the tools I’ve provided? That truly makes sense and fills me with joy.

What I Teach My Clients

Let me share some philosophies that guide my approach to financial management.

It’s crucial for businesses to understand that their financials should work for them, acting as a tool to effectively run their operations.

Firstly, they must know their numbers inside out and closely monitor the trends that emerge from their financial data. By doing so, they gain valuable insights into the performance and health of their business.

Next, it’s important for them to analyze the returns they’re achieving from different aspects of their financial statement. Let’s say they’re spending 50% of their revenue on staffing. Then they need to ensure their employees are efficient, effective, and contributing to profitability.

Similarly, if their marketing expenses are significant, they should evaluate the return on investment from those efforts. I always encourage business owners to consider their finances from the perspective of what they’re gaining for every dollar spent.

In essence, I strive to help them adopt a mindset where they weigh the outcomes and benefits associated with their financial decisions. By doing so, they can make informed choices that optimize their resources and drive their business forward.

Dale Hower is the President of Firm Numbers in Charlotte, NC. His company provides remote accounting and bookkeeping services for businesses and law firms. He ran the financial reporting for large and small law firms across the country for 30 years. He now also provides those services for manufacturers, e-commerce companies and commercial real estate companies.

If you’re interested, call Dale at 980 297 1323 or email him here.